Abu Dhabi Dec CPI slows to 6-mth low of 3.3 pct

Abu Dhabi’s annual inflation slowed to 3.3 percent in December, its lowest level in six months, as food prices dropped for the first time since at least June, data showed on Tuesday.

Inflation in the emirate, which accounts for 10 percent of the world’s oil reserves and more than 60 percent of the United Arab Emirates economy, had been going up last year, peaking at 4.1 percent in October and November. Price growth accelerated to 3.1 percent in the whole of 2010, from a mere 0.8 percent in the previous year, but remained far below 14.9 percent reached at the height of an oil-led boom in 2008, data from Abu Dhabi Statistics Centre (SCAD) showed.

On a monthly basis, December consumer prices dropped 0.8 percent, after a 0.2 percent rise in the previous month.

“The monthly decline of food prices in December is likely to be an exception. This is just a one-off on the radar,” said Giyas Gokkent, chief economist at National Bank of Abu Dhabi.

“What will happen in 2011 is a pick-up in food prices due to a rise in global commodities prices,” he said.

Food prices, which account for more than 16 percent of the basket, fell 1.9 percent month-on-month in December after a 0.9 percent increase in the previous month.

Abu Dhabi, one of seven emirates that make up the UAE, only began reporting regular monthly inflation data last year.

Inflation in Dubai, which was hit by both the global downturn and its own debt crisis, edged up slightly in November to 0.5 percent year-on-year. The UAE and Dubai have yet to release December consumer price data.

In a Reuters poll in December, analysts had forecast UAE inflation of 1.2 percent in 2010 and 2.8 percent this year.